EU Will Take Aim at Big Tech in the Coming Weeks
Regulators Hope to Change Behavior
The European Union is wrapping up work on new rules aimed at changing Big Tech’s business practices. Sources say the proposed rules, which are mainly focused on fostering competition and regulating content, will likely have the largest impact on Facebook (FB), Google (GOOGL), and Amazon (AMZN).
The European Commission claims the new regulations will incorporate European values into the tech landscape. Companies will need to prove that the data they gather won’t be used to push out competitors. If a company violates these antitrust rules, the EU will have the power to impose new regulations on the entire industry. The new rules also seek to standardize regulations about harmful content on the platforms. Companies will need to disclose their content ranking algorithms and commit to removing hate speech and other harmful material quickly.
Company Size Will Play a Role
The EU claimed that it does not want to single out any particular companies. However, the rules will target large tech firms like the names above more than small ones. Market share and revenue will likely drive the European’s decision around which companies are potential offenders.
The EU plans to present the new regulations in mid-December. Before the rules can take effect, they will need to be approved by each country’s government and European Parliament. Those negotiations could take several years.
US Lawsuits Could Be on the Way
The additional scrutiny of tech companies is not just limited to the European bloc. Facebook may be up against antitrust lawsuits in as many as 40 of the 50 US states as soon as next week. These lawsuits could examine Facebook’s practice of buying small-but-growing companies that could eventually become rivals, like Instagram in 2012 and WhatsApp in 2014.
The potential Facebook lawsuit would mark the second time a big tech company has faced court charges in the United States this year. In October, the Justice Department sued Google. Earlier this year, a House of Representatives committee also recommended more stringent oversight of big tech companies. It is possible that the Federal Trade Commission will follow the states’ lawsuit with a related charge.
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